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28 Oct 2020

14. When a student makes a decision about whether to go for college education or not, the student considers only the

a. private marginal benefits and private marginal costs.

b. social marginal benefits and social marginal costs.

c. marginal external benefits and marginal external costs.

d. private marginal benefits and social marginal costs.

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Microeconomics
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Defining Positive externality
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Raushan Raj
Raushan RajLv8
28 Oct 2020

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Related questions

Education is an example of a positive externality: acquiring moreeducation benefits the individual student and having a more highlyeducated work force is good for the economy as a whole.

The accompanying table illustrates the marginal benefit to Sian peryear of education and the marginal cost per year of education. Eachyear of education has a marginal external benefit to society equalto $8,000. Assume that the marginal social cost is the same as themarginal cost paid by an individual student.

a. Find Sian's market equilibrium number of years of education

b. Calculate the marginal social benefit schedule 

Years of Education Sian's marginal benefit per year Marginalexternal benefit to society Marginal social benefit Sian's marginalcost per year

10 $20,000 $8,000 $15,000
11 19,000 8,000 16,000
12 18,000 8,000 17,000
13 17,000 8,000 18,000
14 16,000 8,000 19,000
15 15,000 8,000 20,000
16 14,000 8,000 21,000
17 13,000 8,000 22,000

What is the socially optimal number of years of education?

c. You are in charge of education funding. Would you use aPigouvian tax or a Pigouvian subsidy to induce Sian to choose thesocially optimal amount of education? 

d. How high would you set this tax or subsidy per year of education?

When a government provides a good with an external benefit, to attain efficiency the price paid by consumers is set equal to the ________.

A. market demand price

B. amount paid by taxpayers

C. marginal private benefit at the efficient level of output

D. marginal private cost at the efficient level of output

Which of the following actions is appropriate in a market with an external benefit?

A. taxes

B. vouchers

C. marketable permits

D. price ceiling

When a person receives a flu vaccination, the ________ is the additional benefit the person receives from getting the shot.

A. marginal private benefit

B. marginal external benefit

C. marginal social benefit

D. marginal social cost

Pell grants given to students attending college are most closely similar to ________.

A. public provision of a good

B. private subsidies are given to producers of a good

C. property rights assigned to consumers of a good

D. vouchers are given to a consumer of a good

Technology that prevents Paul in California from using an email account of Sarah's in Maryland means that email is an example of ________.

A. an excludable good

B. a good that is non-excludable

C. a public good

D. the tragedy of the commons

The social marginal cost of the production of snowobiles

A) is less than the marginal external cost of production

B) does not include the carbon emissions from snowmobiles

C) is greater than the sum of the private marginal cost and external cost

D) does not include the increased risk of accidents caused by the operation of snowmobiles

E) includes the noise pollution imposed on those living near snowmobile trails.

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